Annuities
What risk does a life annuity protect the annuitant against?
Answer and explanation
Answer: B. A life annuity pays for as long as the annuitant lives, so it addresses longevity: the possibility of outliving one's resources. Life insurance addresses dying too soon, guaranty associations address insolvency, and interest guarantees address rate movements.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, insurance aspects of annuities
More annuities questions
- What does selling a variable annuity require beyond a New York life license?
- What happens during the accumulation period of a deferred annuity?
- What is the tax feature that makes annuities attractive for retirement saving?
- Where are the assets backing a fixed annuity held?
- Which payout option produces the largest periodic income for a given sum, and why?
- Who bears the investment risk in a variable annuity?
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